Monetary Equilibrium and Price Stickiness: A Rejoinder

Luther and Salter argue for a regime where aggregate demand is restored by an increase in the money supply in response to an increase in the demand for money. They claim that, 1 monetary equilibrium policy prescriptions do not necessarily rely on sticky prices, 2 Cantillon effects can be neglected without consequence, 3 wealth redistributions from monetary policy are unimportant, 4 monetary disequilibrium theorists strive for a stable price level, 5 fewer price adjustments are necessary in their proposed regime, 6 savings and saving are equivalent, 7 changes in the composition of savings do not alter time preference, and, 8 in the proposed regime economic calculation is easier than in a 100 percent reserve system . All these claims are false. They furthermore misconstrue us as preferring negative quantity adjustments to positive price adjustments. This too is false.

Item Type: MPRA Paper -

Original Title: Monetary Equilibrium and Price Stickiness: A Rejoinder-